Reckless Lawn Care Growth EXPOSED!

No, you stink at being a gm. You did exactly the opposite of what he told you to do. Today we're in Illinois visiting Dustin with Augusta Lawn Care.

Today's like a breaking point day. Shut up for a minute and like, I'll handle it.

He owns two locations and wants to open up a third one next year.

Dude, I have no idea what I'm doing. We're negative like 25,000 between the two locations for this year. We're just burning money.

However, in order for those locations to operate without dust in there every single day, we want to reduce the reliance on big one time projects and increase the amount of mowing customers by at least 100.

I know working for me is not easy.

In terms of the third location, I'm almost inclined to say wait another year.

I wish I was a better leader and an easier guy to work for, but I'm just probably not.

Also during the winter, his revenue falls off a cliff. We've got to fix that.

And to be completely honest, I was burnt out. I got super burnt out because we fired the whole team in Champaign last year and I was running that one completely by myself.

Stay focused on your location. Like just make more money over there. This is the Business Breakthrough Show. My name is Mike Andes. I'm the founder of Augusta Lawn Care where we have over 170 locations around the world. And I travel around the country helping small businesses get to the next level. I want to get a location to the point where I can overpay the GM based upon my my increase in hitting capacity. Our goal is to give Dustin a strategy to break through this plateau and grow the business in the next six weeks.

How are you?

Good.

So I'm Dustin Buck. I live in Bloomington, Illinois. We own Augusta Lawn Care of Bloomington as well as Augusta Lawn Care of Champaign. We have a general manager in our Bloomington location. As of yesterday we have three employees, no longer four. And in Champaign it is just me and one employee.

Oh, nice mowers.

Oh, I got to take a picture of this. I feel like I'm struggling being a leader leading Kyle in Bloomington as well as leading the team in Bloomington and Champaign. I just feel like, I feel like I'm missing something and not doing something right. To constantly be having struggles in Bloomington when it should just be a simple thing. That is the reason why I want Mike to come and take a look at everything and just be like, this is what you need to do because we will follow him blindly. So far, everything that he's told us to do has worked. Great.

Now this is the business Breakthrough show, which means we're looking for the constraint in the business and trying to figure out how we can overcome it. And there's only really four constraints in any business. First is liquidity. Cash money in the bank. What do you usually do? You take that money and. And you turn it into leads. You go get more customers. But when you get enough customers, what do you need? More labors. And once you get enough labors, what do you need? More leadership. And so this cycle continues because once I get more leadership and managers, what happens is I have more overhead. And now my liquidity or my profit margins start to drop. And this whole process goes again and again and again as you continue to grow the business. Our goal is identify where the problems where the constraints in this cycle and unleash that growth.

Our financial struggles. Champagne's financial fine. We have a month's worth of revenue in the bank. I never worry about making payroll or debt payments. Bloomington, on the other hand, we are literally living off of projects to get through the month. And that's extremely stressful. The business has never really been in that position before, but it's because of the winter that we had, as well as lack of leadership towards the end of the year.

I know like the. The big goal is getting more recurring revenue. Like the percentage of, of the revenues being more recurring. So here it's trying to get like 320. And that's how many mowing customers do you think we'd be at capacity, essentially?

Correct. So it's 325 to get to capacity.

Got it. And then last year we had like 220. Or is that what we're starting with this year?

We won't be starting with that. I'm literally finishing that up right now. We are probably in the neighborhood of like 180. We did lose a bunch, like 20% or whatever. Yeah, our Q4 collapse was like terrible. Like we had a plan. And then I just got distracted from everything else. And to be completely honest, I was burnout. We fired the whole team down in Champaign, and I was running that one completely by myself, doing about 46 to 50 budget hours a week, working Saturdays and Sundays to get the projects done on top of the 40 to 50 hours a week of mowing.

In the lawn care and landscaping industry, traditionally the last few months of the year is when all of our profit and loss statements get obliterated. I call it Q4 collapse. And it's during October, November and December. A dramatic decrease in revenue happens in many Parts of the country. This is when you have to start thinking about the fact that seasonality kills many lawn care businesses. We don't want to have seasonal services. Everyone's like, oh, spring rush needs to be better. No fix Q4. Because Q4 is what causes that massive lull in revenue, leads and profits in the first and second quarter of the year.

So I was burnt out. We hired a guy from Bloomington to run that location admin. He's still running it. And it was like October, I think when he started October 1st, Kyle had to completely replace the team here. Edmund was starting with a team member that was like, okay, like not great. And I was just like, I'm just like done for the year. Like I was working way too many hours and burnout. Like it would be like being burnout after the spring rush, but it was like delayed. It was like October from the year prior.

What would we do the year prior? Do we gain like 30 or 40 net?

I think we were at like 150ish customers, budgeted hours, probably like 90 this last year. Like 115, 1, 125. Somewhere in that range.

Got it. So we went up like almost 100 net last year at peak.

And the reason for that was, is because Kyle struggled that first year because I handed him a business that had like, it was like 50, 50 like projects occurring. So then he was selling constantly. And then it screwed him in the fall because he was just selling projects all through the spring when we need to be selling, mowing.

Not all growth is created equal. I like to think about your home service business as three different types of revenue. First off, we have one one time projects. These are gonna be jobs that customer only needs done one time. Think of it like a new roof or new windows or an H Vac system. They're usually not gonna get a whole bunch of H VAC systems every week or two from you. So these are one time projects. What is more valuable is a reoccurring service. This is where they might need every week, every two weeks, every three weeks or every four weeks. But they ultimately are doing it ever so often. This would be something like installing mulch in your flower beds. Like maybe you do it once a year. It's definitely not a one time and you never get the customer again. It reoccurs to some frequency. However, the most stable revenue and therefore the highest enterprise value that you're going to get from any type of revenue is going to be recurring revenue. This is where the customer's on schedule. You're showing up at their property every week, every other week, every month, every quarter. But they're on some schedule where you can predict very accurately out in the future of what your revenue is going to be. And so if you're only doing one time projects, I encourage you try to create a maintenance division or some form of recurring revenue in the business. You could even create warranty programs that you sell on one time projects. So that way you have a recurring stream of revenue coming in over the course of every single month, every single year. And that revenue is going to give you the highest multiple on your valuation of the business.

I wasn't really planning on multiple locations, dude. I have no idea what I'm doing. We open the first one, it was like smooth sailing, like kind of like the first year like in business for myself, I think we did 28,000 in revenue and we bought a business that had like 14 accounts or something. Like if you want to call it a business, that's what we bought. Then like slowly grew it up to like 200,000. And then as soon as we were in Augusta it was like straight up. To start the second one though, it's like now I have to manage the first one and make sure that like the money maker still makes money and try to do this spin off thing. And so to figure out how to manage managers and kind of a team to help him, it's like it's a headache.

Now you might be thinking why in the world would Dust have two locations or be thinking about another one in the future when the locations he has now are doing between 500 and 800,000 in annual revenue. And the truth behind that is because that's the Augusta business model is six to eight employees max, doing $800,000 in annual revenue. Once we get above eight employees out in the field, that's when typically you need another manager of some sort, like an administrator in the office or potentially an estimator salesperson. I want to keep it as flat an organization as possible. One general manager to handle operations, the sales being automated using instant pricing as well as the admin being handled by command center. That's how we're able to scale this. And so yes, you could grow a 2 million, $3 million organization and do it one location. But I'm immediately going to have more overhead, a bigger shop space, not this great little space he's got here for so cheap. And it starts to get very expensive. I want to be able to get cheap rent, have no overhead staff, no admin staff, and have that all be done at Command Center. That's why we break things up into multiple locations and getting to that 7,800,000 Anna revenue is about right for six to eight employees. And if I have a great fuel worker, I'm not going to lose them to another job, but rather I can mentor them and they can grow inside the organization and eventually become the general manager of the location they're working for.

And so the focus was 100% mowing this last spring and that's how we had the jump. So we're doing the same thing this year, but it's like we're not scheduling projects. April and May. Okay.

And that's Bloomington. That's Bloomington.

It's both. So I told Kyle, I'm like, just get. You have two brand new guys that are like have no mowing experience. Get them good to go next week for mowing so that when mowing starts you have four guys, two crews that can handle all the mowing.

I think he'll do way better if you just focus on mowing 100%.

Cause it makes your fall too. Yeah, so like that's one clarity that we had this year is like I'm doing all the estimates, Command center's doing all the admins.

Okay. So you're doing estimates on both for both of them. So basically you're serving as regional, you're taking all sales off you're operations for him. And then the goal is to get Bloomington to the point where you can hand it to a gm, but it's all recurring.

So Kyle will be the one that runs Bloomington.

Oh, okay.

So he. So like, so Edmund runs Champaign. Yeah, yeah, so Edmund runs Champaign and that's the newer location. Then Kyle runs here, Bloomington. And I'm just doing all the sales. They're like the help with admin and then all the operations. So like their job is get the work done and like make sure that command center has what they need to do their job.

Well, this is command center behind me where thousands of phone calls are answered every single day. And the reason we make that a priority at Augusta Lawn Care is because I know that many times the very first person that answers the phone and gets the estimate to the customer will win the job. And so if I can just answer the phone, I'm gonna be ahead of so many of my competitors that are maybe answering their phone one or two hours a day between jobs. Things go to voicemail or if they do answer their phone, they're out in the middle of a job site and everything's super loud around them and it sounds super unprofessional, but choosing the right phone system for your small business is super important.

Then I'm just gonna fill your schedule.

And that's the first time you've done that last season.

Last season I was in Champaign.

Was Kyle doing sales?

He was doing everything.

No, I think it'd be so much better than just having both of them focus on mowing. So you do the sales. You can also then govern the jobs that do come in and make sure the right budget hours. Because, like the last thing a GM needs in the middle of sperm rush is one project that goes like 40 hours over.

Yeah, like the one we're working on today.

Yeah. Well, it's on spring rush. But you did that vid, right?

Yeah.

Yeah. So at least it's, you know, at least.

I don't know if it's my fault or if it's like two of the crew members have never installed mulch and like Kyle just wasn't there. Like he just sent him with a guy who's kind of done mulch before. Yeah. So Kyle runs Bloomington. He has for two years. But to help. He had really no management experience before. He just had the lawn care experience. So, like, he could always do the jobs. He could kind of do estimates, knows how long stuff takes. But then when you start managing a team and equipment and customer complaints and all that, it's just adds so much to someone's plate. And when you don't have equity in the business, it makes it really hard. Like, I'll work 14, 16 hours a day. Kyle's got a family.

He gets paid on the profits of the business. And if there's cash left over, but he doesn't get the whole sum. And so that.

Adds complexity. It's so hard. You have to constantly be selling. And then if he's the only one qualified to do the job, now he's on the job, taking him from selling. So it's like recurring has been our focus since he took over now. Because it's like, now you don't even have to think, like the mowing is on the schedule. Just get guys to do the mowing and then go home. Like, you don't have to worry about that constant, like, sales follow up, getting the work done. Rain pushes a project off or pushes like, just recurring, like, makes it so much easier. Like, I know my communication is lacking because, like two of them are wearing jeans today. The two new guys that started yesterday wore jeans yesterday. They wore jeans today. It's like it's clear. Like, that's not a thing. And it happened two weeks ago. Same thing with both of them. Like I told Edmund or I told both GMs, okay, no one is to start unless all their paperwork is filled out and they have access to all their apps. Told them that on Tuesday, Monday, he started a guy. Nothing filled out. And then same thing on Tuesday, nothing was still filled out. And then Kyle, no debris to be dumped out here. Just. It's my thing. I don't want the mess there. And then you're shoveling it back on. Dump stuff out there.

So we look at the 4L framework, there's been plenty of liquidity and money in the bank. They've got a ton of leads, and honestly, they've been finding labors, and that's not been a huge issue. The real problem and the bottleneck for growth in the 4L framework for Dustin and the growth of his business is leadership. Finding great general managers, giving them incentive for them to be able to continually grow the business and make it more profitable. This is going to require Dustin a completely different skill set than training employees out in the field. He's gonna become a better leader.

But I just, I feel like I'm failing as a leader. Especially like a day like today. Like, everything that could break is like breaking. It's like another example is like two of the. We started two new guys on Monday and they both wore blue jeans yesterday and today. And it's like we wear brown, like, go home. But like, at the same time, another guy called out. He had court today. Yeah, I just feel like I'm not being a good enough leader for both GMs, especially, like, you know, Champagne fired a guy today and it's like, what did we do wrong? What can we implement better? It's like literally on Monday, both those things happen after going over it.

Like, what's your cadence for the meetings with the GMs?

So 20 minute Zoom call is what we try to keep it on. So Kyle gets like five minutes to kind of give an update and then anything he has issues with, Edmund does the same thing. And then we kind of go over, like, what am I seeing? What do we need to focus on? What's coming next week? And we do it together. Because what I found is when I did it separate, I'm repeating myself and I'm wasting 45 minutes. And so by doing a 20 minute call, it's like, we gotta get this done. And it can always go another 20 if needed.

Is it like Mondays at a certain time or something.

It's Tuesday mornings at 8:15 so the crews can get out and roll. The only thing that makes that difficult is with training. So like today, like Kyle didn't go and help with the mulch because we had a meeting at 8:15. And so instead he went and picked these up and was on the call during that Edmund, same thing. He had a guy start today. Luckily he told him to start early, went to the job, showed him everything. You start working, I'm going to hop on this call and then I'll be with you after. And then he got fired two hours later. Kyle can handle Bloomington pretty well. Like he doesn't really reach out to me for much, but he's been doing it two years. This will be his third. Edmund's like, you know, today, hey, how do I do this? They're like, we had our GM meeting this morning. We do it via Zoom. We all three hop on all in one. And he's like, I think we need to let this guy go. You know, by the end of the week. I'm like, what do you. Why are we prolonging it? Like you said last week, you need to be like, oh, just fire him today. Like it's just because I've done it so many times. Like just do it. Like just. We're wasting money at this point. If the guy's inefficient and he doesn't show enough effort, like just boot him. But that's his first fire in person too. So he's like freaking out. He's like calling me after. He's calling me before. He's like, yeah, how often are you.

At the two locations with them?

Yeah, so Monday mornings I'm there for the team meeting in Champaign. So now there's not a team. But I was there Monday, team member didn't show up. So that was like part of the reason he got fired. I'm there. So they work four tens down there. So I'm there Monday, Wednesday, Friday. I'm always there Monday morning. And then Wednesday is like their optional meeting. So I try to be there Wednesday too.

My thought is like, because it's gonna get hectic with the GMs is like, even if you just made those meetings where it's in person, it's still, well, just the one on when you're there at their location, I feel like you'll get a little bit more just like overall preparation for it too. And then you're going to be sitting in front of them asking for numbers. Now every single business sort of Finds their own cadence and how frequently they want to have team meetings. Just keep in mind team meetings. You're not producing any revenue and so especially if you're having pay for performance, the crew wants to get out and actually make money as quickly as possible. So being super organized, being quick with your team meetings, really important. I like the idea of doing joint meetings, but like I didn't see any benefit when I did my gyms in groups until there's four or five of them, when I was actually saving like four to five times. Otherwise the one on one, I could be so much more laser with them. And like when I'm talking, they know I'm talking about them. One of the most impactful ways to be able to improve your culture and be able to retain great employees is to have one on one meetings. Especially if you have less than 15 or 20 people. You as a manager and the owner, being able to spend time, even 15 to 30 minutes with your crew can be the difference between them leaving front of their job or staying with you for much, much longer. And the overall cohesiveness of the culture will be much, much greater. Yeah, because what I did when I had like two or three, even now if like Nick talks to them is regional, I'm like, hey, be really intentional with who you're talking to because they can just shove it off like, oh, that was for someone else.

Yeah, right.

So like if you're already going to be there in person, it might be worth it. Just do, hey, we're gonna do one on ones every Thursday when I'm here. I'm gonna do every Tuesday or Monday or whatever when I'm there. And we're gonna offer more one on one. It's still probably taking 20 minutes for each one. But then they, there's no one, they can be like, oh, that's for someone else. What I recommend during the one on one meetings is stay focused on what can be better for them. You know, what parts of their job they like, what parts do they prefer not doing or could be improved? What things they think could be improved in the business, who do they like working with and then really focusing on them and their future and their career. So giving them critical feedback about like, hey, here's the things you can do to be able to make more money. Here's the things you can do to be able to get a promotion. These are the type of things that focusing on them and them only on a one on one meeting is super valuable. And then also if you did before, that way they can't get busy because that's what we found all the time too. As soon as we made them do it like an hour or two in the day, there was so many chaos going on. It was, it was just a wreck trying to get them on the calls or like fill out the forms or whatever. I would just be here. They know it's in person. They're not going to forget, they're not going to get busy. It's like before work starts. The day has not begun yet. You don't have any excuse. The reason we do it in the morning and we have a stand up meeting is because otherwise it can get dragged out really long. Just by standing up. You will cut the time it takes for meetings to go by in half simply because everyone is standing up. Also for your front running team members that are out in the field, a lot of times there's. They're just tired in the morning, they just finished their coffee. They literally roll out of bed 20 minutes ago to have a sit down meeting. You are going to have much, much longer times spent doing nothing in terms of labor revenue. So try to make it as tight as possible. Have an agenda for the meeting so you can quickly get to the items even if it's only five or ten minutes. And then they know they have you too sometimes. What we found is that the gym wouldn't bring any problems if they didn't want the other gym to hear it.

That is something that I get too because like Edmund will say something and then Kyle interjects, it's like what? Just shut up for a minute, I'll handle it.

Yeah.

And like same thing in our GM group chat because like everything goes through that. It's like you know, the hiring or the firing deal today, like hey, we need to fire them. Then Kyle interjects like, yeah, I know you said that last week or whatever. Yeah, just shut up. Like we know.

Yeah, I think right now if you did one meeting with them a week, that's still very hands off from a regional manager's perspective to have one in person meeting and spend 20 to 30 minutes with the GM a week. Not a lot like that. Same, still scalable. Like you could still have 10 locations and still be doing that. And so like I don't think backing up to like zoom meetings once a week is needed yet. It is a bit of a distance but you're already at both locations. Like if you're like, hey, I don't go to that location unless there's a fire, then we do zoom. But if you're going to be there already. I would just have them. I just have them in person.

My communication skills, I've played the cards that I've been dealt. And what I mean by that is one of my best friends from high school is running my Bloomington location. My cousin from Kansas City is running my Champagne location. So I'm playing the car. You know, they came and worked for me. I'm allowing them. But that friendship and family aspect makes it a little bit easier almost because, like, I can just be straight up honest with them and they will work probably more than what somebody that's not related to me would. They have the buy in. They see what Augusta's done for me and they're like gung ho on it. And so I need to be a better communicator, especially when we hire a GM that is not friends or family, because I haven't ever really been good at outlining. Like, hey, this is what your job actually is really until this year. Right. Fully. It's like happening.

Yeah. So. So by clearing a little bit of delineation where it's one on one with you, they're accountable to you, not to the other gm. Like, the accountability comes in more like pressure on, like, hey, you share your numbers and someone else is seeing them and it's a bit of a competition. Yeah, Like, I love my gyms. You look competitive.

Yeah, yeah, same. That's what made both of them good team members, is they're like, I'm going to be the top.

So putting the numbers in like one your GM chat great. And then just be like, hey, we're going to do one on ones in person. Do they do coaching calls right now with someone else?

Do I would.

I would also tie their incentives to all three of these things, like filling up the form, having the one on one with you, and then a coaching call every month. I would tie some sort of intent of the general manager around doing all.

Three of those things.

At Augusta, we have several different forms of support that we're talking about with Dustin. Let me explain. First off, we have daily. These are the masterminds that I am on with a daily call with all the owners. That's what we call the Mike Minutes Mastermind or the 3M. Now what I'm talking about is a weekly cadence where we're going to do a scorecard with every single location. Now, for my general managers, they're going to be filling the scorecard in as well, and it's going to go over certain key performance indicators, such as how Many budget hours were completed, how far you booked out. These are the things that are really important operationally. It only takes like 10 or 15 minutes but keeps them on track as to whether or not they're being efficient with the labor in the field and if they're staying busy doing estimates because especially during spring rush, I see the GMs do they. They drop the ball in one of those three areas and that's when things start going haywire. You fill out the form. Having the meeting with you and then having a coaching call once a month with someone besides you just make it really worth their time because you know, and you can even choose who they have to have their calls with. You're paying the GM to be on the call and you're paying the franchise fee. So like I would go to my, like I go to Nick. Nick is the person I have them do their calls with.

Yeah.

So I'm like Nick, this is what I want you to tell them.

Yeah.

And like that shop, I drove by that and it's stinks. Yeah. Fix it.

Yeah.

So like you can be pretty direct with them, with the coaches and then they'll like vicariously pass it along then monthly we're going to do coaching calls now with a general manager like Kyle. Dustin wants to make sure that these monthly coaching calls are being done with a third party inside of the coaching program. This allows the coach to hold the general manager's feet to the fire of the systems without the owner feeling like they're nagging on their own general manager. Because when they go to the coaches, they're going to look at the same numbers. They're going to the profit and loss statement. They're going to see what the schedule and how many budget hours are on the calendar. These are systems that we talk about that now. Someone else in the coaching program can tell the general manager. So it's not all coming from the owner.

I will say too like, because Kyle and I are such good friends as well as Edmund, my cousin. Like I'm pretty direct. There's no. I mean I told him like forget everything you prepared for the meeting last week because they both. I didn't want to say disobey but like they both did exactly the opposite thing of what they were told they to do. It's like where am I failing? What do I like help me help you. Yeah. But I think I agree if it's coming from a coach too, like that solves the problem of me not having.

Partly just being the common. Like the same thing with my Brother. I never talked to my brother about business at all that way. Just the blurred line, the family. And, like, the fact that, like, yes, you can be blunt, but, like, they also, like, ah, it's Dustin. Yeah, we're friends.

Oh, he's just mad again.

Yeah, yeah. Versus someone else being like, no, you stink at being a GM because you did exactly the opposite of what he.

Told you to do. Yeah.

Okay. I would probably create an incentive around it. So my GMs, if they don't do those three things, they don't get a bonus in the quarter. And now with those being big, they don't miss anything. Like, if, you know, I was on Nick's call the other day, both my genomes are the first ones on the call. They know. They know they're not gonna go a bonus. And the bigger the profit sharing gets, you could just tie it to that. Yeah, but if you're in growth mode and they're not profitable yet, you just say, hey, there's a bonus in the quarter. You're eligible if you do these two, three things. Now, I'm a huge fan of profit sharing and giving a piece of the distributable cash or the profits to my general manager. However, if you're in growth mode and you're growing very quickly, it could be a solid year and a half or two years before your location is consistently pumping out profits that you can actually share with a general manager. So what do I do in the meantime? Well, I'm going to incentivize them to grow as fast as possible to capacity. In other words, I'm going to incentivize them on growth and more revenue and more customers. So what we want to do is we'll give Dustin's general manager the opportunity to make more money if we get more recurring customers on the schedule. Because we know if we get enough recurring customers on the schedule, we can raise prices. The big goal is getting more recurring revenue, like the percentage of the revenues being more recurring. And that's how many mowing customers do you think we'd be at capacity, essentially?

Correct. So it's 325 to get to capacity, 195 budget hours weekly.

Think of your capacity as the max number of customers you could serve or the max amount of revenue you could perform if all of your trucks were operating every single day and all. All of your employees are being used fully.

So three trucks. So each location has three trucks. This is one of Bloomington's, and then two are out with the crews. And I want to run Two guys in each one. So the reason why we came up with 325 is our average mowing price. It comes out to about six budget hours. 0.6 times 325 comes out to 195 budget hours. That 195 budget hours is three full trucks. So two guys in each truck, 65 budget hours a week.

Now when you hit capacity and all of your trucks are being used every day, all of your employees are being used full time. Now we have ourselves a decision because you're at capacity, at capacity, we have a decision to make. Do we go into profit mode or we'll go into growth mode? Growth mode is I'm going to hire more people, I'm going to buy more trucks and continue to grow the business. Profit mode is I'm going to raise prices, I'm not going to hire more people and I'm not going to get any more trucks. And rather I'm going to focus on profitability.

And then once we hit 325, we'll go profit mode. So raise prices, we'll lose some. But by the amount that I want to raise prices by, it'll add about 10,000 to the bottom line every single month.

I want to get a location to the point where is I can overpay the GM based upon my, my increase in hitting capacity. Yeah, like if you can increase your fat by 10 grand, you just wiped out their whole pay, even if you gave it all to them. And now at that, that kind of pay range they are very much involved in like making sure things are done well. And you set up the pay structure where it can go down. Take the 300 on 325 threshold. Anything above that every month you get extra thousand dollars. Because like if you get Bloomington to that this year, I'm like, wait, that one's done. Remember, the Augusta business model is that we grow to on $500,000 in annual revenue and then raise prices instead of going out and buying more trucks and hiring more people. Here's what it looks like. The first couple years we're trying to grow as fast as possible, but once we hit capacity, we're not going to go buy trucks, we're not going to hire more people. We're just going to raise prices as we get more customers. This is going to keep us around the same amount of capacity, but increase our profits again. The goal, $800,000 in annual revenue with $200,000 in net profits. But until a location hit capacity, raise prices and then I have incentives in place to where they are so incentivized on daily operations. I don't consider it as, like, locked. And we said no more trucks, no more equipment. And if we hit this number, we raise prices, and it goes below this number, you lose a bonus.

Got it. Our customer value is really low. It's like 1100 bucks for a mowing customer.

That gets us into our winter services conversation, Mr. Viernang. That's rough. At Augusta lawn care, we do winter services during the off season. We might mow grass for seven, eight, nine months out of the year. But for that off season, when the grass is dormant, we still show up to the customer's property every two weeks. And instead of mowing grass, we're going to edge the lawn, we're going to pick up branches, we're going to blow off walkways, we're going to make sure that any bushes or trees that are touching the house are trimmed off. We're going to spend just as much time as we usually would for mowing. We're going to spend doing these other services. Even though the grass is dormant. This keeps recurring revenue coming in, but more importantly, saves the customer money because saves them having to do a bunch of leaf cleanups and a spring cleanup. We just keep coming to the customer's property every couple of weeks and keep the property looking good year round. Okay, so is this so morally you have the problem with opt out?

100%.

Got it. Did you try selling the service, though?

Yeah, tried, but I didn't go hard. So here's what happened. I got super burnt out because we fired the whole team in champagne last year.

Now, last spring, when Dustin was still the acting general manager for the location because of this leadership bottleneck, it ended up where all of his labors, he had to end up getting rid of them all and resetting the entire team. Why? Because, again, we keep hitting up against leadership, and it causes a lot of downstream negative effects in the business.

I was running, like, 50 budget hours and doing projects Friday and Saturday and just like, burnout. So then I took Edmund from Bloomington, moved him down there, and was like, just get the work done, and I don't want to talk to you. It's. Everything's going to be dispatched. Everything's going to be. Or just come in, get the work done, and then go home. And then it's hunting season. So I was like, I'm burnout. I'm going hunting. Yeah, I killed my biggest fear I ever killed. Like, it kind of worked out in that front, but it didn't help the money side of things. On top of that, I'll be taking a fishing trip. I'm leaving Wednesday of this week and I'll be back Sunday with my dad. He retired last year. He planned this trip for us to go on. And I feel like if Mike were to have come last week, he would say absolutely under no circumstances circumstances do you go on that trip. This is kind of my last hurrah before hopefully Mike comes and does a turnaround video. He calls me an idiot and says why are you going on a fishing trip? You need to be focused on your business. And that's kind of the communication that I need of just like this is what you need to do. Get it done and we'll do it. So like yeah, we burnt like Q4 was just. It was mayhem. Like we're digging ourselves out of a hole. 25,000 between the two locations right now. I think it's 10,000 in champagne. 14,000.

So basically a break even like late April hopefully.

Yeah, yeah, okay.

That's pretty normal if you have a bad key for though.

Yeah, yeah, it sucks cuz I knew what I needed to do.

But like, but if we can solve the problem. Justin. Like I think though that by like what you're doing this year, you're more recurring revenue, you're taking the sales, they'll be better in operations. You're going to hit capacity at one location by doing that. You should go into the fall, be like, hey, like this is. I'm not like completely stressed out of my mind. And if there is collapses, it should be falling on the GMs now. And so then it's under like I think we know what to do.

Yeah, you just gotta sell, you just.

Gotta sell this whole high moral ground when really you just want to go hunting. We can just be honest. 100% just hunting. Thank you. Thank you. Out here, like I don't know if I really trust the whole like opt out system. I will say I feel really bad about that.

Yeah, I don't like it. I never have. And we did the opt out the first two years.

Yeah, yeah.

And then you know, we. The squeaky wheel gets attention and so you have 20% that fall out which is normal churn anyway. I just, it always felt like when I was doing winter service, I'm like, man, I hope they don't look out their window and see me.

In years past, Dustin didn't have a great conversion of mowing customers into winter services. Only like 15, 20% of his customers that were mowing converted into this other service on the during the off season. But the reason, because he didn't actually sell it. He didn't show the customer that they're saving 300, $400 every year by not having to have a fall cleanup and a spring cleanup. What are we doing? We're trying to turn these one time jobs into recurring revenue. It's better for the business. But more importantly, I can do it for a lower cost to the customer. We've just got to present this to the customer, show them a video, show the price breakdown of what they're saving by using winter services. If the customer is spending $800 for a fall cleanup and $800 for a spring cleanup, that's $1,600. It's a whole lot cheaper for me to come for three months and spend six $60 every two weeks. That's like $360 over the course of the winter. Way cheaper than having to get two massive cleanups completely separate. We just flip it to going aggressively selling them. Every person knows what the services is and even like if you really have a problem with them orally, don't work, don't put them on the service unless you talk to them.

Yeah. So you still just go back to opt out.

I have my general managers. No, no, I have them sell it. So like my general managers were heavily incentivized on calling every single person and talking to them. Like if there's 500 of them, you're calling every single one. It's going to take you three weeks.

Yeah.

So October, get ready to buckle in because we got a lot of calls to do. And then like if, if even in Champagne, if there's 100, 150 customers, I'm going to knock on all their doors. Like I would say if there's under 100 customers, I'm knocking everyone's doors. If it's under 500, I'm going to call every single one. Because you need to get them on the first time. Yeah, but like if a GM again by getting them into profit mode, they're incentivized. And then you just simply, simply lay out the math of winter services versus not winter services. I actually got all like both the gyms, an iPhone just to do imessages for winter services. So they're sending voice notes to every customer and explaining to them because it was way faster. They're like, hey, when we call and hit voicemail we can't really do anything. But if we leave the voice note and the imessage, everyone will respond to us.

Yeah.

So I agree. Then you're gonna go through 100 customers and you're gonna go just imessage after one after the other. Explain it to them like, hey, this is what it cost for your, your wall cleanup. This is what cost. Here's the value of it. We're usually booked out six to eight weeks for spring cleanups. We'd like to just keep you looking good right up until that. Like you have to give them all the training. And then I would do reps with it, so Nick would just sit down with them, go over and over and over and take notes, say that we're different. You do that for one day and then you tell them for three weeks that last month of mowing your job is not anything besides convert people into winch services. That's the difference between at least is breaking even and then being the $25,000 hole. The number one most important thing when it comes to improving your sales in home services is selling yourself. And if that means looking in the mirror and convincing yourself, that's fine. Because ultimately the reason a lot of times home service business owners can't sell their services is because they are not the target market. And so the very first thing I want you to do when it comes to improving your sales is sell yourself on the fact that your product and service serves the need for the target audience, not you. And you are not the target audience. You can get on a ladder, you can fix the H vac, you can handle a 200 pound machine an 80 year old can't. And by the way, them getting on a ladder and trying to manhandle that machine could potentially put them in the hospital. You are not the target audience. And in order to be able to sell your services, you'll have to believe in your product and service. You have to believe that you are the best option for the customer. And if you're like, well, honestly I don't do a great job, well then fix the product, fix that first so you can have the confidence to, to be able to sell yourself to the customer. But again, Bloomington, let's say we hit 300 customers. If you can get 40% of them, even a hundred of them to convert into winch services, that's like at least one or two employees. And the GM covered fully all the winter service people as when there's snow on the horizon. FYI, just a reminder, we come on every couple weeks. This one looks like it's gonna be a big storm. It's over 600. Do you want to be on the Schedule.

Yeah.

Everyone's gonna say yes.

Yeah. So again, so you wouldn't even. So, like the way we worked at this last year, it's bi weekly service. If a snow comes in between, we drag that next service back.

Yeah. But what you could do is say if it's over a certain amount, because then you know you're gonna get done in one service anyways, then it's gonna be more. So you protect yourself on the downside. But if it's like an inch, you're gonna go there, blow things off and it's good. And like you get pull the visit forward. And we always know that after snow, the property rarely needs anything done. So really how we look at it is like we're trying to get four to five services in before snow. Snow comes, we get rid of it and then like we have a couple more before spring rush. I've seen over the course of hundreds of locations at Augusta and thousands of different businesses and home services that if you take one quarter of their profit and loss statement out of their financials, they're usually running a really good, profitable business, like 20 to 30%. But then you add in one quarter where they're losing 10 or 15 or 20% of profit and they're actually paying money to stay alive and in business. Now all of a sudden they don't have a very profitable business. And that's when you get to single digit profit margins, typically in a lot of home service businesses. Now at Augusta Locker, we have five different winter tracks and one of them is Christmas lights. And we've gone ham on Christmas lights. We've invested a lot in actually creating augustalights.com just so that our owners are able to solve the problem of Q4 collapse. And it's a basic service. Look, I already got the truck. I'm showing up in the same truck. We got lights. I'm just plugging them in to the bed here along the driveway. I'm going to do the similar thing on the gutters to be able to get ridge lights for Christmas lights. Now what this does is allows the owners inside of Augusta Nation to be able to sell during October, November and December and then take down the lights during January when otherwise those are typically our slowest months of the year.

So we thought we talked about bringing lights into the, into the fold. Kyle, like, won't go down a ladder, so I'm gonna be the one doing them all. And I hate that. But the ones that we bid this year that we won, they were like, it's stupid. Money is it worth creating another bottleneck where I'm the one selling it, I'm the one doing the work, and then gonna go start another location eventually. And now we have all these Christmas like customers that still have to be hung. And like a GM will go down a ladder.

If we look at how many customers are having between two locations. Let's just call it 450 by the end of the year. Yeah, we can end the year with like this is like 400. 400 between the two. And you're able to convert 40% of those into winch services. That's going to net you out $80,000 over the next winter. And so would we go. If we went all in on Christmas lights, we'd probably do that as well.

Yeah.

So like the path of least resistance without having to buy more equipment, getting more storage space for lights, training people, getting your gym to do something he doesn't want to do, a whole lot more friction. I would say I get these two locations dialed in, making more money. Get figure out winter services for both of them, wait one more year, get them both in profit mode. And then when you start a third one, you're looking for a GM that actually is willing to do Christmas lights and you're willing to travel a lot further for Christmas lights. So I would just have one truck do the entire thing. Because right now, besides you, no one's.

Doing it exactly right.

So like, let's just do the thing that we know they can do, which is like break out the beds, trim the bushes and everything else we train them to do. It's super efficient. If you can just get everyone scheduled, filled.

That's our issue right now is like Kyle has incentive, but he's not going to get a check for four months other than his salary.

Right? Yeah, but there's two things. One, you have a, you do have a decent bonus on hitting 325.

Yeah. Yeah.

I would probably do a 300 and a 325 one. So just like. Because 300 is like very, very obtainable.

Yeah.

And then. Well, because you're at 180 now, I'm going to do a 250 now. Give him a benchmark to that. Because this is the thing. You control the lead flow. So if you really wanted to, you could just get him to 325 Barry for faster. By spending gobs of money in marketing. You also do all the sales. You can control how many door hangers he does. So like you kind of control that bonus. But you just need to get to capacity as Fast as possible. Like it's worth more than five grand.

Yeah. Oh it's worth way more than.

So like incentivize it.

Yeah.

Like if you're willing to give one month of profit based on a price increase, give them one month of profit. Do a three thousand, do a one thousand, a three thousand and six thousand. That's ten grand. That's one month of profit if they can raise price increase prices. So the, the big one six grand is the 325. But then give them a 1,000 on 3,000.

Got it. And that. Yeah. So for, for Bloomington it would be.

250, 300 and 325.

All right.

1250 is gonna happen. Right.

That's going. We're gonna gain that just by natural. Right.

So you give me a little bit of something. A thousand bucks at 300 we now we start. We're starting to become pretty profitable. Great. 3,000 gets the capacity and you raise the prices by 10. Give them six grand.

What is that? That price increase? We did eight and 12 in champagne and lost four customers in August and there was a drought. That's what sucked. Last year we did a price increase. I told Kyle five and seven and a half and the average price increase was 225 because he like cherry picked everybody. He'd be like $3 increase, no increase.

Yeah, that's when I make a thing to command center. Like I want everyone price for increase.

That's what I learned and was like just have command set because command did the champagne one and the next month there's four grand.

Yeah. No, I don't let my GMs do pricing reasons because they're too emotionally attached and I would be too.

Yeah. So that was the learning curve. So what would you recommend that price increase be when we get there? I was thinking another 8 and 12. Cause we basically did do an increase in size. But it doesn't really matter. Right. It was your capacity. So just raise it.

Exactly. Now you can't just jack up your prices and think that somehow that's gonna make you premium. You actually gotta have a great product but a big piece that people forget. It's not just the actual work you do that needs to be premium. It's the whole service and that's what brand is. How does it make the customer feel when they call you? How does it make them feel when they go to your website when they submit an estimate request form? Is there automations are they able to put a credit card on file? What's the process like when they actually get the quote and get it accepted. These are all pieces and parts of your brand. And if you make that really strong and you have a premium brand, you can charge a premium price. By having a higher price, I can actually afford afford to spend money on ads. I can actually spend money on getting the trucks wrapped and decal in uniforms. And so if you're like, well, I can't afford it. I can't afford to get a great website, I can't afford to get great uniforms. I can't afford to wrap my trucks, you can't afford not to. Once you get it done, you can now charge a higher price. And by doing that, by having a higher price and a higher value, you're going to attract a higher premium customer that's less price sensitive. You can't have super low prices. You've got to actually increase them. And this is why a lot of times people realize in home services, they raise their prices and no one leaves because they have good customers. And the customers you lose during a price increase are usually your least premium customers. The ones that don't accept all of your upsells, they always only use one service. They're never accepting all the other services you offer. And you're gonna also depend like, you might go harsher if you're like, man, we're getting 10 new customers a week right now, and I have to get it down 30. Yeah, well, then you're gonna go even more. Like we did 26, 27% in ours and lost 10%. But I need to lose 10% this year because we're going to cut all the trucks out. So I would incentivize that pretty heavily.

The capacity.

Yeah, yeah, yeah. And then that gives him enough incentive to get up to that. But then if you get 325 or 300, you know, you have a way bigger pool to convert into winter services. My spring rush is like, I just want more customers to sell them winter services. That's it. All right, so what is the six week game plan for Dustin to break through this size of business and continue to grow? First off, we've got to make sure we have a weekly meeting of one on one with each of the general managers in person. He's already there. Do it in person. And go over the weekly scorecard. So everyone's on the same page.

Yep. So as soon as Mike left, I think you guys were here on a Wednesday. And so Thursday I'm at the Bloomington shop. Anyway, so Thursday morning we had our first one on one. Just me and Kyle and then we had our team meeting and then on Friday, Edmund and I had our first one on one. But moving forward, we do our together call on Tuesday mornings. It's like 20 minutes. That's more of. We call it like a brag table. Like tell me what went really, really well. And like kind of have a little bit of a competition between the GMs. And then Wednesday mornings is Edmond's one on one to kind of go over all of the stuff that we went over in the group meeting as well as specific issues that he has. And then Kyle's is still on Thursdays. The implementation this year is like bar none compared to what it has been in the past. And I told them I'm like, I can be a little bit rough to work for and just pretty blunt on like how I feel. And they just are taking it on the chin and just like, okay, that's what I need to do to get better. That's the expectation. And there's really no like back and forth or me like had to bring a couple things up over and over again. But it's going well. The. The one on ones I would say are more, you know, specific to them. And then I find myself repeating a little bit like in the, in the together one. Like Kyle brought up a good point. Edmund. Here's this type of thing. But yeah, overall it's really good. And I think they appreciate that one on one time too.

Yeah, obviously I'm really good friends with Kyle and have been forever. And then Edmund's my cousin, so they get, they have my number. They know they can call me anytime. But to be face to face in person when I'm not there every day, I think that is extremely beneficial to them.

Number two, he's going to tap into the existing coaching program and software we have at Augusta, but make the general managers accountable to a coach inside of the program and then Dustin and talk to that coach in the back end to get third party feedback on how the general manager is doing.

Yeah. So as it currently sits, they are both with Anthony out in, I think it's New York. I haven't given calls to any coaches based on feedback that they both had. Anthony's coaching style is probably a little bit more like Chuck's not really a yes man. More like, did you do what we talked about in the last one? Because if you didn't, then I don't really have anything for you. And so I'm hoping this week I have a little bit of downtime on Friday, hoping to reach out and kind of connect because I think they both had coaching calls this week and just seeing what their pain points are and kind of build that relationship with Anthony. I've called him a couple of times or talked with them at conferences and whatever, but never really had a sit down, you know, this is kind of what my expectations are type of thing. So as far as who they're with, they're both with Anthony. That's been established. I just have not personally, you know, gotten with Anthony to figure anything out as far as that's concerned. Mostly because they're, they're benchmarks and the goals that we have set, they're hitting.

I'm sure, like, if one of them went off the rails, I'd be like, I should have contacted Anthony like a month ago. Like, it's always, it's in good time. It's like I was telling my dad the other day, it's like, I struggle sometimes because, you know, in the hard times, it's the first time, that's when you're gonna pray. And then when it's easy, it's like, oh, yeah, it's, everything's going fine. What do I need to do that for? It's kind of the same thing with a coach. It's like when the, when the wheels are falling off, it's like, oh, no, save me. There's just, you should have just, you know, checked in consistently. So Friday I think we'll probably get something set up.

The third part is we want to create an incentive program for the general managers that even if they're in growth mode, there's incentive for them to grow quickly. Because I don't want to take five years to get to profitability. I want to grow as fast as possible and get to capacity. So I'm going to incentivize them getting to capacity, knowing that once I get to capacity, I can raise prices and immediately turn on the profit knob.

Don't quote me on this, but I think we've gained like 40 customers from last year on top of what we lost. So we still have a couple that are like, hey, you know, we don't need you still. There's maybe one or two a week that are like that, but we're consistently gaining. Like, I think last week we had 16 new mowing customers and the week before that there was like 10 or 12.

So yeah, champagne, as far as recurring revenue is like growing a lot quicker. But also, if you look at the GMs, like, I have benchmarks for them and I make them fill out how many door hangers they hung each day of the week. And Champagne's door hangers are higher than Bloomington's and so we're spending the same amount of marketing online. It's just the effort on the door hangers is what's moving the needle.

The fourth part of the six week program is just focus on recurring revenue and getting to capacity and then raising prices. Prices and getting into profit mode on both of these locations. Augusta, we want it past 500,000 in revenue. He's done that with one location. Now let's do with a second location. Both of those locations in profit mode, you raise your prices. Now you're doing 7, $800,000 per location, $200,000 in net profits per, and then we go start our third location with plenty of money in the bank.

We're not doing any follow up calls because pretty much all of our mowing is just the instant quotes or over the phone estimates or like the door hangers. So they're accepted immediately.

So I'm not doing any follow up calls because we don't need any of the projects. And we're still like, we're probably closing six or seven projects a week right now. And like I know in Champagne there were two specific ones because I was like, if I was running this location, I would love these two jobs. But one of them was four grand and one of them was like 3, 800. They put the 50 deposit down, they got their scheduling date and they were like, we're not waiting that long refund our deposit. So that kind of sucks. We actually are just talking before we hopped on this call and we may call both of those customers because Edmund got somebody hired so quickly and tell them, hey, we can get to you a little bit quicker because we added some more staff just to try to close that like 7 grand worth of work. And that also helps him as far as his.

His bonus incentive as far as revenue is concerned. And I, I've told him the whole time like, I don't care, like if you want the top line revenue and you want to hit your bonuses, that's what you're incentivized for. So like, don't let me get in the way of that. But realize how much easier the rest of your year will be if you just focus on recurring. And so when he heard that, I know his ears like perked up. He's like, oh, I can actually get those projects done. But.

You know, it's difficult when you're telling them not to schedule projects, but projects are getting scheduled and the revenue comes down because of it, or we lose a project. That's tough, but.

The thought process behind it is your eight hours in the field to do that project would be better spent doing door hangers and gaining two mowing customers.